ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Inflation generated by an increase in the price of inputs such as labour, raw materials, and so on is known as cost-push inflation. As the price of the factors of production rises, the supply of these commodities decreases.

Detailed explanation-2: -Based on speed, there are 4 different types of inflation – hyperinflation, galloping, walking, and creeping.

Detailed explanation-3: -Cost-push inflation An increase in the price of domestic or imported inputs (such as oil or raw materials) pushes up production costs. As firms are faced with higher costs of producing each unit of output they tend to produce a lower level of output and raise the prices of their goods and services.

Detailed explanation-4: -Cost-push inflation occurs when the supply of a good or service changes, but the demand for it stays the same. It occurs most often when a monopoly exists, wages increase, natural disasters occur, regulations are introduced, or exchange rates change.

Detailed explanation-5: -Cost-push inflation occurs when overall prices increase (inflation) due to increases in the cost of wages and raw materials. Cost-push inflation can occur when higher costs of production decrease the aggregate supply (the amount of total production) in the economy.